Law of Contract: Consideration

Consideration is vital for an agreement to become a binding contract. Parties must promise to give or do something for each other.
Definition of Consideration: Something of value exchanged by one party for goods, services, or a promise from another.
- It can be money or something else, like performing an action or agreeing not to do something.
- Illegal or immoral acts cannot be consideration.

Car Sale: Brittney promises to sell her car to Bill for $1,000$ . Bill's payment is his consideration, and Brittney's promise to sell is hers.
Rental Lease: A landlord agrees to provide housing, and the tenant promises to pay rent in return.

Consideration cannot be something done in the past.
The person enforcing the contract must have provided the consideration.
The value of the consideration doesn't need to be equal (economically adequate), but it must be recognized by law (legally sufficient).

Past consideration means an act was already completed before a promise of payment or exchange was made.
If someone promises to reward you for something you've already done, you generally can't enforce that promise because your action (consideration) happened in the past.
Exception: Lampleigh v Braithwaite (if three conditions are met):
1. The act was done at the promisor’s request.
2. Both parties understood that the act would be rewarded (by payment or benefit).
3. The payment or benefit would have been legally enforceable if promised beforehand.

This means only the person who provided the consideration can sue to enforce the contract.
Tweddle v Atkinson: Two fathers promised to pay their children money after marriage. The groom couldn't sue his father-in-law for the promised money because he hadn't given any consideration for that specific promise.

Consideration must have some value in the eyes of the law, no matter how small.
Thomas v. Thomas (1842):
- Facts: Mr. Thomas wanted his wife to live in their house for life. After he died, his executors agreed she could stay if she paid $1$ a year rent and kept the house in good repair.
- Issue: Was paying $1$ a year (which was very low) good enough consideration to form a contract?
- Held: Yes. The $1$ rent and the promise to keep the house in repair were considered valid consideration. The court doesn't judge if the value is fair (economically adequate), only that it has some legal value.
- The court reasons that parties freely decide the value, and if consent is given, the agreement should be enforced.

Three chocolate wrappers, even though they were thrown away, were held to be valid consideration for pop music recordings.
Nestlé gained economic benefit (increased sales) from the wrappers.
Sufficiency usually means taking on a new duty in exchange for the other party’s promise.
Generally, just performing an existing legal duty is not enough for new consideration.

Facts: Two sailors deserted a ship. The captain promised the remaining crew a bonus if they got the ship home.
Held: The promise was not binding because the crew was already contracted to handle normal voyage difficulties (including crew shortages). They provided no new consideration for the bonus.
The court was wary of economic pressure.

Facts: Similar to Stilk v Myrick, but so many crew members deserted that the remaining crew's duties became much more dangerous and exceeded their original contract.
Held: By bringing the ship home under these extreme conditions, the crew took on completely new duties beyond their original contract. This new duty was valid consideration for the captain's promise of more pay.